Replacement cost for settling property insurance claims is less costly than the actual cash value method.

Question

Quizplus · Accepted Answer

Replacement cost is typically more expensive than actual cash value because it considers the cost of replacing the property at current market prices, while actual cash value accounts for depreciation. Therefore, settling property insurance claims using the replacement cost method is generally more costly than using the actual cash value method.

Replacement Cost for Settling Property Insurance Claims Is Less Costly